The best time to begin asking questions of your mortgage lender–such as how much mortgage can I afford?–is before you have your heart set on a home. This allows you to get an idea of your house-hunting budget and can help you understand the things that ultimately affect how much you will pay for the home you choose. These are a few of the key questions you need to have answered.

Don’t Wonder How Much Mortgage Can I Afford? – Ask!

There are many variables that affect how much mortgage you can afford. They include things like your current debt load, your income from work and investments, savings, and even how long you anticipate continuing to work – or maintaining your current income level.

Be aware, when asking your lender,  How much mortgage can I afford? …because this may be a question that you can answer for yourself. The rule of thumb has traditionally been 30 percent of your pre-tax income. However, Bloomberg suggests that this number offers little real value for determining what is affordable to different people depending on their individual situations. That is just food for thought. Of course, our loan officers here at Starboard Financial can help you determine the best scenario for you.

Find Out About Other Costs that May Be Wrapped into Your Mortgage Payments

Depending on various factors, there are several other expenses that could be included in your monthly mortgage payments. These include things like:

  • Private Mortgage Insurance
  • Homeowners Insurance
  • State Taxes
  • Mortgage Principle and Interest

These expenses affect your monthly note and if you withheld too little for insurance or taxes one year, your monthly payments could increase for the following year.

Learn about Points and How they Impact Your Total Mortgage Payments

Points are your friend. In fact, they can be your best friend if your goal is to pay a lower amount of money for your home. Points refer to a fee you pay the lender at the closing to secure a lower interest rate. Ask how many points they’ve included in the quoted interest rates and what benefits you can enjoy by increasing them.

At Starboard Financial, we want to help you make informed decisions when buying a home. Call us today with any questions you have when securing a mortgage.